India’s ageing power distribution network is finally getting a digital upgrade.
The Data Center Tailwind
And the investment surge in data centers and renewable energy, among others, is acting like a tailwind. This is because AI-ready data centers need a lot of power. And not just that. They create massive, instantaneous spikes in electricity demand. As per Hitachi Energy, the power load can fluctuate from 100 megawatts (MW) to 250 MW in a matter of seconds.
Interestingly, a legacy grid cannot absorb these sudden variations. To overcome this limitation, a digitalised network and infrastructural upgrades are actively underway. This is part of a much broader need to upgrade India’s aging energy infrastructure to meet rising energy demand.
One critical part of that upgrade is Grid Modernisation through the rollout of Smart Electricity Meters, which is actively underway. Nuclear Power and Green Hydrogen are another piece of the puzzle.
According to the Press Information Bureau, as of 15 November 2025, 4.7 crore smart electricity meters have already been installed across the country. These deployments have happened under the government’s Revamped Distribution Sector Scheme (RDSS).
The RDSS scheme aims to reduce losses, modernise infrastructure, and improve the financial health of discoms. But 4.7 crore is just the tip of the iceberg, as 25 crore smart meters are targeted for completion by March 2028.
In addition, utilities are upgrading substations and replacing transformers and conductors to improve grid efficiency. The RDSS total outlay stands at ₹3 lakh crore, according to the India Smart Grid Forum. Companies involved in smart grids, transmission equipment, automation, and electrical infrastructure are well-positioned to benefit from future prospects.
And engineering and power players are quietly positioning themselves at the centre of this transition.
#1 Hitachi Energy India
Hitachi Energy India is actively building the components and software systems that make this modernised, real-time electricity network possible. Hitachi integrates digital technology to ensure grid flexibility and security.
Digital Convergence: How MicroSCADA Redefines Grid Control
The company utilises advanced communication and automation technologies to feed real-time information from the physical power grid into a central management system. For instance, MicroSCADA and Network Manager SCADA provide optimized control through integration and connectivity among various devices.
RTU500 Series remote terminal units serve as communication hubs, bringing physical grid data back to SCADA systems for real-time analysis. The company has pioneered digital substations in India, which replace traditional copper wiring with digital communication to provide reliable, round-the-clock power and enhanced system flexibility.
Asset Intelligence: Real-Time Monitoring via ‘e-Devices’ and Sensors
A key component of a smart grid is the ability to monitor the health and performance of grid infrastructure in real time using sensors. Hitachi manufactures digitally enabled transformers equipped with advanced “e-Devices” and sensors.
The management views intelligent power systems as a multi-year growth story, driven by a surge in electricity demand and the nationwide clean-energy transition. To strengthen its positioning, Hitachi is strategically pivoting to harness new, high-growth segments.
The ‘Edge of the Grid’ Pivot: Targeting Data Centers and BESS
This is called the “edge of the grid,” which is a critical component of a modernised smart grid ecosystem. This expansion targets Data Centers, Battery Energy Storage Systems (BESS), and Electric Mobility. Integrating them requires a smart grid because legacy power networks cannot handle high energy demand.
BESS is a major part of the connectivity push. India has an ambitious target of 250 gigawatts of new generation capacity from renewable sources over the next five years. This will help tackle a major challenge of intermittency. It is also developing local competencies in India for key technologies such as BESS and High-Voltage Direct Current (HVDC).
The company recently commissioned an advanced microgrid at its Maneja factory in Gujarat. Through this, the company aims to ensure strong visibility and establish industry leadership as demand for grid-scale storage accelerates.
Order Book Analysis: Decoding the ₹29,872 Crore Revenue Moat
As of Q3FY26, the company’s order backlog stood at an all-time high of ₹29,872 crore. This provides revenue visibility of about 4 years, based on the Trailing Twelve Months (TTM) revenue of ₹7,277 crore. Utilities and Industries contributed almost equally, with Utilities at 47% and Industries at 43%, while Transport & Infrastructure made up 10%.
#2 KEC International
KEC International has a robust presence in grid modernisation. It is strategically shifting its focus toward grid infrastructure to support global energy transition goals, decarbonisation, and the integration of renewable energy.
Digital Infrastructure: The Landmark Navsari GIS Commissioning
A landmark achievement in KEC’s grid modernisation portfolio is the commissioning of India’s first and one of the world’s largest (765/400/220 kV) digital Gas Insulated Substation in Navsari. This facility significantly reduces copper cabling and embedded carbon emissions.
It provides capabilities such as enhanced remote diagnostics, improved asset monitoring, and seamless integration of components from multiple vendors. KEC is also expanding its footprint in highly technical segments.
HVDC & STATCOM: The Engineering Moat
HVDC is critical for modern grids because it significantly reduces transmission losses over long distances, minimizes land use, and lowers environmental impact. KEC is currently executing a 1 GW HVDC project in Mumbai. This includes two converter stations and a transition station designed to increase the city’s power supply capacity by nearly 50%.
Additionally, KEC is executing three HVDC transmission line projects and actively bidding for massive upcoming HVDC opportunities in India and Saudi Arabia. Further, KEC recently secured its first-ever STATCOM order, marking a strategic advancement in its substation offerings.
STATCOM is essential for stabilising the grid, enabling higher penetration of renewable energy sources, and reducing reliance on fossil-fuel-based generators. In addition, KEC is heavily involved in building renewable evacuation corridors and green transmission networks.
Order Book Resilience: ₹36,725 Crore Base with a ₹1.8 Trillion Pipeline
As of Q3 FY26, KEC’s order book stands at ₹36,725 crore, providing revenue visibility of around 18 months, as per TTM revenue of ₹23,988 crore. The order book mix is well-diversified across various business segments and geographies. Transmission and Distribution accounted for a 64% share of the order book, followed by Civil (26%) and other segments.
Domestic orders account for 55% of total orders, while international orders account for 45%. KEC is targeting an intake of around ₹35,000 crore for the next year. The tender pipeline stands at ₹180,000 crore.
In the export market, the Middle East is a key growth engine for KEC. For context, as of the end of FY25, the region accounted for 17% of the company’s order book. Consequently, the recent conflict in this region could act as a short-term headwind for the company.
#3 Schneider Electric Infrastructure
Schneider Electric Infrastructure (SEIL) is a key player in grid modernisation. Schneider’s technological contributions are actively modernising grids globally, including in India.
The EcoStruxure Core: Driving IoT Integration and Grid Analytics
At the core of Schneider’s grid modernisation efforts is its EcoStruxure platform, an open, interoperable, and IoT-enabled architecture. EcoStruxure provides advanced analytics.
For power distribution companies, EcoStruxure enables the transition to greener generation and smart grids by reducing costs and technical losses, and improving operational and financial viability. Another major part of modernising the grid involves making it more environmentally sustainable.
For instance, Schneider modernised Bihar’s distribution infrastructure using EcoStruxure Grid solutions. This resulted in a 90% improvement in power reliability and up to an 80% reduction in energy consumption. The company has also secured orders to supply Control and Relay Panels and other systems for the digitalisation of 765 kV transmission networks.
ESG Innovation: Eliminating SF6 with Pure-Air Switchgear
Schneider is pioneering the shift away from SF6 gas (a potent greenhouse gas traditionally used in electrical equipment) by introducing pure-air insulated switchgear. To address the need for rapid infrastructure deployment in space-constrained places, the company offers plug-and-play E-House substations and Power Train Modules.
Grid modernization requires moving from reactive to predictive maintenance. It facilitates this through its EcoCare membership program and EcoStruxure Transformer Expert sensors. They reduce the risk of electrical failures by up to 75% and extend the lifespan of key grid assets.
As power grids evolve to accommodate variable renewable energy, Schneider provides solutions to ensure grid stability. The company supplies Advanced Distribution Management Systems, microgrids, and specialized switchgear for integrating solar, wind, and BESS.
Lean & Agile: Analyzing the 7-Month Order Backlog Velocity
The company’s total unexecuted order backlog stands at a robust ₹1,707 crore. This order book provides revenue visibility of less than a year, as per the TTM of ₹2,888 crore. According to management, the order execution timeline is 3-6 months. And thus, this low absolute figure is actually a sign of an efficient business model.
The Valuation Gap: Is the Grid Modernisation Story Already Priced In?
With superior growth, Schneider has one of the strongest return ratios (Return on Capital Employed (ROCE) and Return on Equity (ROE)), followed by KEC and Hitachi. From a valuation perspective, KEC trades at a discount to both the 5-year historical and industry median.
Both Hitachi and Schneider trade at exponentially high valuations and thus pose a risk. Any earnings weakness could send the share price tumbling, as we have seen in high-priced stocks lately. In contrast, KEC valuation offers comfort.
| Valuation Comparison (X) | |||||
| Price-to-Earnings Multiple | Return Ratios | ||||
| Company | Company | 5Y Median | Industry | ROCE (%) | ROE (%) |
| Hitachi Energy | 161.0 | 170.0 | 42.2 | 19.4 | 13.8 |
| KEC International | 20.0 | 40.0 | 18.3 | 18.0 | 12.0 |
| Schneider Electric | 120.0 | 79.0 | 42.2 | 40.9 | 74.0 |
| source: screener.in (Data as of 14th May 2026) | |||||
India’s power distribution network is undergoing a digital overhaul, with over 3.5 crore smart meters already installed and 20.3 crore sanctioned under the RDSS programme.
This multi-year capex cycle has opened opportunities for companies such as Hitachi Energy India, KEC International, and Schneider Electric Infrastructure. They are positioning themselves at the centre of India’s grid modernisation push through smart grids, digital substations, HVDC systems, and automation-led infrastructure.
That said,keep these stocks on your watchlist to see how they tap into upcoming demand.
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted, and widely used source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Disclaimer:
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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